Eurozone’s PMI Services was finalized at a six-month low of 50.9 in July, a considerable drop from June’s figure of 52.0. Moreover, PMI Composite was finalized at 48.6, descending from 49.9 in June, marking an eight-month low.
Turning attention to specific member states, PMI Composites revealed that Spain posted a 51.7, reflecting a six-month low. Ireland’s index equaled 50.0, an eight-month low, while Italy and Germany saw similar eight-month lows of 48.9 and 48.5, respectively. However, France’s PMI Composite showed the most significant contraction, falling to a staggering 32-month low of 46.6.
Reflecting on this troubling data, Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, stated: “The Eurozone is off to a bad start in the second half of the year. Economic output fell in July after stagnating the month before and showing generally solid growth during the first five months of the year.”
He pointed out that manufacturing primarily drove this slump in activity, though the services sector also saw a slowdown. He noted, “In the services sector, a weak phase is heralded by the fall of the incoming new business index into contractionary territory.”
De la Rubia also noted the divergent economic performance across Eurozone, with French service companies scaling back their activities significantly while Spanish companies continue to expand, albeit at a slower pace than in the first quarter.
“The contrasting economic performance is making the already-difficult job for the ECB even more challenging,” he added.
